Rescuing the Canadian Economy

Our federal government appears to be hell-bent to ratify and implement CETA, the 600-page Canada-Europe treaty that few, if any, members of parliament have read. Consequently, they can’t possibly understand that they are unilaterally amending the Canadian Constitution.

by Paul Hellyer

The people own the patent to create money. The banks do not! They are simply licensees that enjoy the unique privilege of creating what we call money (bank deposits) to the extent approved by parliament.

So, here we are at the end of another year, and Canada has reached a historic crossroad. The existing system of having all money created as debt has reached a dead end. If we borrow more, there is no way to pay it off, and we will be paying interest forever. Similarly, higher taxes are not the answer. They are already too high for people with low income.

The only common sense solution is to have the federal government use its power to have the Bank of Canada create enough money to meet our essential needs. We know that will work because we did it from 1939 to 1974, and it worked like a charm. The only impediment today is the lack of political will.

If you ask a politician or bureaucrat, why they don’t support government-created money (GCM), they respond, “That would be inflationary”. This is because one of their professors told them so, and they repeat it as rote.

How do I know it is not inflationary? It is because we Canadians created large sums of GCM for 35 years and our economy was no more inflationary than the average.

As anyone in the business should know, it is the amount of money created that determines prices and not who prints it. Money is money whether it is government-created (GCM), or bank-created money (BCM).

Under the current system of so-called “capital adequacy” the banks are really free to increase their capital, print more money, and create an inflationary bubble, as they have on many occasions.

The current system where banks create about 97% of the total money supply, all of it as debt on which interest has to be paid, while no one creates any money with which to pay the interest, is inherently inflationary. That is due to the fact that to keep the economy growing it is necessary to create (a) enough new moneyeach year to pay the interest on the existing debt and (b) enough additional debt money to keep the economy growing, however slowly.

A good example of government-created money being used for a long period without inflationary effects is The Isle of Guernsey. They have printed money for 200 years to pay for all of its public works. The result has not been inflation.The result has been full employment and no debt.

On the other hand the failure of the present system to maintain the value of money can be illustrated by the fact that one U.S. dollar at the time that the Federal Reserve System was established just over 100 years ago, is worth about 3 cents today. Talk about inflation!

Our federal government appears to be hell-bent to ratify and implement CETA, the 600-page Canada-Europe treaty that few, if any, members of parliament have read. Consequently, they can’t possibly understand that they are unilaterally amending the Canadian Constitution by giving international banks a veto over our sovereign right to create our own money for our benefit. In effect they will be killing the goose that can lay those golden eggs. To do this is morally intolerable.

One advantage of being old is that I have seen the systems that work and ones that don’t. I am 100% convinced that our government is headed in the wrong direction. The stakes are so high, and I feel so strongly that we must try to salvage the situation before it is too late, that I asked two of my visionary friends to join me in retaining Rocco Galati, one of Canada’s best constitutional lawyers. We have launched an action in federal court to restrain the government and parliament from implementing CETA, on the grounds that it is beyond their power to compromise the most basic of our sacred rights of self-government.

Fighting the federal government in court is a very expensive procedure. But when our government favours the rich and powerful 1% at the expense of the 99%, there is no alternative.

Please join us on this very critical initiative to rescue our economy.

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EVENT

Paul Hellyer is a former Minister of Defence. He will present these subjects in Toronto on December 15th at the Ontario Institute for Studies in Education, 7 pm, 252 Bloor Street West. Free event. In Vancouver, there will be short films, panel and discussion on January 25th. VanCity Theatre, 1181 Seymour Street, doors at 6 pm. Suggested $10 donation to cover rental costs. Email: CBRVancouver@gmail.com Phone: 604.329.1706